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PNB Housing Finance’s Journey to becoming the ‘fastest growing’ Home Financing Company in India:

PNB Housing Finance in a span of last 5 years has gone through deep transformation and has done what many in this space would consider a miracle. Innovation and a serious look into talent management, PNB Housing has managed to create India’s fastest growing housing finance company. At the heart of its success is its ‘customer friendly’ tag.

For a company that was set up in 1988, as a public sector holding, the transformation really started with the divestment of 26% equity to New Silk Route. Sanjaya Gupta, MD & CEO, PNB Housing Finance caught up with Manisha Natarajan of CNBC-TV18 and said, “The real transformation started in July 2010, with the implementation of the PPP beginning July 2011 and it became very apparent for the people of the country in Oct 2012.” The changes became apparent in all aspects of the business thereafter. Transformation of employees, technological changes, revamping physical infrastructure, adopting a new target operating model and new brand positioning to change public perceptions, improved customer reach and augmenting the delivery model were all part of PNB Housing ’s massive revamping campaign.

ICICI Lombard expects SEBI nod for its IPO in next 2-3 weeks:

ICICI Lombard’s plan to list on the stock market looks well in place. The due diligence for the 13 percent stake sale to private equity players will be completed by end of the month. The company is expecting a SEBI nod for its IPO in the next 2-3 weeks, reports CNBC-TV18’s Yash Jain.

Shares of Catholic Syrian Bank are trading at around 25% premium in the grey market, making it difficult for potential bidders to push the overall valuation down. So, whoever — CentrumBSE 15.18 %, InCred — wins the bid, may have to shell out a lot more premium to get on board.

The stock is being traded at Rs 180 apiece, setting a benchmark for any transaction for the prospective buyer to take a stake. The book value is Rs 120 a share and is trading at 1.5 times of that, valuing the bank roughly at over Rs 1500 crore.

Despite Canadian billionaire Prem Watsa abandoning the idea to buy a majority stake in Catholic Syrian Bank, investors are quite upbeat about it. ET had recently reported that Deutsche Bank’s former chief Anshu Jain-backed Incred Finance is competing with US private equity giant Warburg Pincus and Aion Capital for a controlling stake in Catholic Syrian Bank

InCred Finance, backed by former Deutsche Bank co-CEO Anshu Jain, is competing with US private equity giant Warburg Pincus and Aion Capital for a controlling stake in Catholic Syrian Bank after negotiations between the Kerala-based lender and Canadian billionaire Prem Watsa-controlled Fairfax hit a roadblock.

The new set of investors is expected to make formal offers by September, several people with knowledge of the matter told ET.

“Yes, we are talking to a new set of investors.

Hopefully, within a few weeks, we should be able to start exclusive dialogue with one of them,” said a person with direct knowledge of the process.

The 97-year-old bank is held by Bangkok-based Indian businessman Surachan Chansri Chawla along with a few high net worth individuals and some private equity funds.

Earlier this year, Fairfax made a formal offer valuing the bank at around Rs 1,300 crore.

Hero FinCorp, the vehiclefinance arm of two-wheeler maker Hero MotoCorpBSE 0.03 %, is looking to raise about $120 million, or Rs 800 crore, from India-focused private equity (PE) firm ChrysCapital, two people aware of the development said.

In September 2016, Hero FinCorp had raised about Rs 1,000 crore in the first round from investors, including ChrysCapital. The PE firm and financial services firm Credit Suisse had invested around Rs 700 crore in the company, while about Rs 300 crore was invested by its parent, Hero Group. “Hero Fin-Corp has sent out feelers to ChrysCapital for the second round of investment. The deal is in an initial stage,” said a person close to the development.

The second round of fund-raising is towards the company’s plans for expansion and buying stake in other NBFCs, another person in the know said. “It makes perfect sense for Hero FinCorp to sell some stake at this point in time. The only problem is valuations; the sellers have quite high expectations,” said another person in the know.

The board of Catholic Syrian Bank (CSB) met on Monday to discuss various capital raising plans of the bank after talks with Prem Watsa-owned Fairfax Financial Holdings collapsed owing to valuation differences, said three people who attended the meeting.

“The board is currently weighing three options: whether to revive the IPO (initial public offering) plan or to sell 5% stake to multiple investors or go ahead with a strategic stake sale of 51%,” said T.S. Anantharaman, chairman of the Kerala-based bank and one of the three cited earlier.

“We will be taking a decision very soon,” he added.

Mint had reported on 13 July that the bank was reconsidering a share sale, three years after it had filed a draft red herring prospectus to raise Rs400 crore.

In June 2015, markets regulator Securities and Exchange Board of India (Sebi) had approved its public offering.

The plan was, however, dropped because of volatile market conditions prevailing at that time.

“We need to raise capital which will meet the requirement for the next three years,” said the second of the three people cited earlier, on condition of anonymity.

Investors are punting that the next multi-billion dollar baby from the HDFC stable is born – HDB Financial Services, the non-banking finance subsidiary of HDFC BankBSE -0.16 %, the nation’s most valuable lender. It may soon head to Dalal Street where many average investors have turned millionaires by investing in Housing Development Finance.

HDB Financial, the company that gives out personal loans, car loans and does recovery services, is being traded in private deals at anywhere between Rs. 500 to Rs. 550 apiece, valuing it around Rs. 45,000 crores. That is almost a triple of where it was trading six months ago. It is the sixth most valuable NBFC in the roll of honour.

“This is now the largest unlisted NBFC with a market capitalization of Rs 45,000 crore,” says Nitin Rao, Founder of alphaideas.com, which tracks shares in the unlisted space.

ICICI Bank on Tuesday said the joint venture agreement between it and Fairfax Financial Holdings Ltd has been terminated ahead of the IPO of ICICI Lombard General Insurance Company — a JV between the two entities.

“In pursuance of the proposed initial public offering (IPO)), we inform you that the joint-venture agreement dated October 4, 2000 (as amended/restated from time to time) entered among Fairfax Financial Holdings and ICICI Bank has been terminated pursuant to a termination agreement executed on July 3, 2017,” ICICI Bank said in a regulatory filing.

A Termination Agreement is a customary provision for an IPO.The agreement is executed for the protection of the parties in the event of non-completion of the proposed IPO on or before a mutually agreed date.

Earlier in June, ICICI Bank had informed selling a part of ICICI Bank shareholding in ICICI Lombard General Insurance ahead of the proposed IPO.

Catholic Syrian Bank-Fairfax deal collapses on valuation:

Prem Watsa-helmed Fairfax Financial Holdings Ltd’s proposed deal to pick up a 51% stake in Catholic Syrian Bank has fallen through over differences in valuation, according to five people aware of the matter.

The Canadian billionaire arrived at a valuation of Rs60-100 a share after an exercise conducted by global audit firm KPMG, said one of the five. All five spoke on condition of anonymity.

The bank’s own valuation done by an external agency put the number way higher. According to a 30 May Bloomberg report, this agency arrived at a valuation of Rs165-200 a share, plus a control premium of at least 15%.

Spokespersons for Fairfax and Catholic Syrian Bank did not immediately respond to emails seeking comment.

“As a policy we cannot comment on company-specific information,” said a KPMG spokesperson.

TMB plans to list by 2019:

Tamilnad Mercantile Bank (TMB) is planning an initial public offering (IPO) before 2019. “Shareholders’ issues are being resolved. Two courts have ruled on share issues related to two factions that should resolve the matter once and for all,” said S Annamalai, chairman, TMB. If all went well, the IPO was likely before 2019, he added.

The 96-year-old bank will list to meet Reserve Bank of India regulations. The IPO will provide an exit to some investors, mainly foreign institutional investors.

TMB executives said the bank’s shares were privately traded at around Rs 400 and this price could double before the IPO.

Foreign institutional investors (FIIs) have indicated they might dilute 5-10 per cent of their holdings, Annamalai said. FIIs hold around 20 per cent in TMB. The FII stakes are mainly held by Ramesh Vangal of Katra Holding. Disputes have erupted over transfer of shares by Katra Holding and RST Ltd to Subcontinental Equities. According to reports, Subcontinental Equities is a subsidiary of Standard Chartered Bank.

CDSL public offer to impact BSE:

The coming initial public offering (IPO) of equity in Central Depository Services (CDSL) will impact its parent, BSE, in multiple ways. First, there will be capital gains, as BSE’s stake in the company will come down to 24 per cent, from 50 per cent. In fact, BSE had sold a 4.15 per cent stake in CDSL for Rs 34 crore during the December 2016 quarter and booked some gains. Second, given the sticky nature of CDSL’s revenues and high margins, it contributed 36 per cent to BSE’s consolidated net profit and 18 per cent to its revenue in FY17. With a lower share, …

Galaxy Surfactants: Taking risk for success

Risk is associated with growth. The greater the risk, the bigger the chance of growth. Taking risk is thus not only a business strategy but can also be a life-changing experience. Take the case of the founders of Galaxy Surfactants that is a leading manufacturer of surfactants and specialty chemicals which are used as intermediate raw materials by marquee brands.

The story of how Galaxy Surfactants came into being goes all the way back to 1979, when G. Ramakrishnan or Geera, wrote a letter addressed to his four friends on Valentine’s Day. The letter harked about a vision of growth and prosperity and set out a way to achieve that “definite goal”. The letter was so convincing that all five (including Geera) quit their high paying jobs and plunged headlong into the business. And they never had to regret that momentous decision.

Five friends shocked their families and friends by chucking their high paying jobs even before they could zero in on a business plan. This move largely influenced by Alexander the Great was to ensure that they did not have an exit options. Success was their only option and they used that option to the hilt.

Eyeing a relevant spot among exchanges:

Back in 2012, when the MCX Stock Exchange (MCX-SX) was working towards starting its equity segment, its actions were being closely watched by the existing two stock exchanges – the BSE and the National Stock Exchange (NSE). To be fair, the unveiling in February 2013 did make an impact, albeit for a short period of time.

Enhanced technology got a foot in the door while brokers saw benefit as membership fees came down drastically. For the first time, perhaps, there was disruption in a segment where the NSE was the dominating big brother and BSE was a distant second with no third player in the fray.

But much water has flowed under the bridge since then. Today, there is no MCX-SX. What exists is the rechristened Metropolitan Stock Exchange of India (MSEI) and even after being in business for close to a decade – it started its currency trading segment in 2008 – it is still trying to find a place in the hugely competitive exchange space.

Are PNB HF’s premium valuations sustainable?

Since making its debut on the bourses on November 7 last year, PNB Housing Finance (PNB HF) has rewarded investors handsomely. The stock has more than doubled in this period (over its issue price) to Rs 1,649. Valuations, too, have re-rated, with its price to book valuations having raced ahead of larger peers like Indiabulls Housing Finance (Indiabulls HF) and Dewan Housing Finance Corporation (DHFL). At current levels, PNB HF trades at 4.4 times the FY18 estimated book, as against 3.6 times and 1.7 times for Indiabulls HF and DHFL, respectively. Though some factors that differentiate PNB HF from its peers, these premium valuations appear sustainable.